Iran Blockade Threat Sends Oil Prices Reeling

Oil prices dropped for a second consecutive day despite US President Donald Trump's threat to maintain an indefinite naval blockade of Iran. Brent crude futures declined by 0.34%, reaching $86.77 per barrel, while West Texas Intermediate (WTI) crude futures gained 0.42% to $80.92 per barrel.

The price drop came on the heels of a weaker outlook for global demand and lower projections from OPEC and the International Energy Agency. Crude inventories in the US also posted their biggest weekly increase in over three and a half years.

The United States has continued its blockade of Iranian ports, citing increased economic pressure on Tehran. The Pentagon chief stated that the naval blockade could remain in place indefinitely, with Treasury Secretary Scott Bessent saying 'we are going to apply measures like have never been seen in the history of economic isolation on a country.'

JPMorgan estimates that every additional month of disruption could add $7-$8 per barrel to Brent prices. Goldman Sachs also warned that Brent could climb to $120 per barrel if shipping disruptions through the Strait of Hormuz persist.